Crypto Tax UK: The Complete 2025/26 Guide to HMRC Rules

There is no separate "crypto tax" in the UK. HMRC taxes cryptoassets under the rules that already exist for other assets: Capital Gains Tax (CGT) when you dispose of tokens, and Income Tax when you receive tokens as a reward for doing something, such as staking or mining. This guide explains how those rules work for individual investors for 2025/26 — the tax year that ended on 5 April 2026, with the return due 31 January 2027 — and how they applied in earlier years if you are catching up.

Everything here is based on HMRC's published guidance, mainly the GOV.UK pages on selling and receiving cryptoassets and HMRC's Cryptoassets Manual, linked in the Sources list.

Do you pay tax on crypto in the UK?

Yes, if you make a gain when you dispose of it, or if you receive crypto as income. Simply buying and holding crypto with your own money is not taxable. Tax becomes due at the point you sell, swap, spend or give tokens away and your total gains for the tax year go over the annual exempt amount (£3,000 for 2025/26).

HMRC's view, set out in its Cryptoassets Manual at CRYPTO20050, is that "in the vast majority of cases" individuals hold cryptoassets as a personal investment and pay Capital Gains Tax when they dispose of them. Income Tax applies to tokens received from employment, mining, staking or certain airdrops. Only in exceptional cases does HMRC treat an individual's buying and selling as a financial trade.

Which tax applies: Capital Gains Tax or Income Tax?

Capital Gains Tax applies when you dispose of tokens you hold as an investment. Income Tax applies when you receive tokens as a reward — for example staking rewards, mining income, lending interest or an airdrop you had to do something to receive. Many people end up with both in the same year.

The guides on Capital Gains Tax on crypto and staking tax in the UK cover each side in more depth.

What counts as a disposal?

A disposal is wider than a sale. HMRC's Cryptoassets Manual (CRYPTO22100) lists four types of disposal: selling tokens for money, exchanging tokens for a different type of token, using tokens to pay for goods or services, and giving tokens away to another person (unless it is a gift to your spouse or civil partner).

Two points catch people out:

• Crypto-to-crypto swaps are disposals. Trading bitcoin for ether, or ether for a stablecoin, is a disposal of the coin you give up even though no pounds reach your bank account. You use the sterling value of what you receive as your proceeds.
• Gifts are disposals at market value. If you give tokens to a friend or family member (other than a spouse or civil partner), you are treated as having sold them for their sterling value on that day, even though you received nothing.

Paying a transaction fee in crypto is also a small disposal of the fee tokens (CRYPTO22280).

What is not taxable?

Buying crypto with pounds, holding it, and moving it between wallets or exchanges you control are not taxable events. HMRC says there is no disposal where you keep beneficial ownership throughout, which covers transfers between your own accounts. Gifts to your spouse or civil partner are "no gain, no loss" transfers: no tax at the time, and they take over your original cost. Donating tokens to charity is also normally free of Capital Gains Tax.

How much is crypto tax in the UK?

For disposals in 2025/26, Capital Gains Tax on crypto is charged at 18% on gains within your remaining basic rate band and 24% on gains above it, after deducting the £3,000 annual exempt amount. The same 18% and 24% rates apply for 2026/27.

The rates changed part way through 2024/25. Disposals from 6 April to 29 October 2024 were taxed at 10% and 20%; disposals from 30 October 2024 onwards are taxed at 18% and 24%. The annual exempt amount has also fallen sharply, which is why more people now have gains to report.

To find your rate, GOV.UK's method is: take your taxable income (income minus your Personal Allowance), add your gains after the annual exempt amount, and see how much of the total sits inside the £37,700 basic rate band. Gains inside the band are taxed at 18%; anything above is taxed at 24%. Where gains fall into both bands, the allowance is set against the gains that would otherwise be taxed at the highest rate.

Worked example (GOV.UK, 2026/27). Your taxable income is £20,000 and your gains are £52,600. After the £3,000 allowance, £49,600 is taxable. Adding it to your income gives £69,600, which is above £37,700. So £17,700 is taxed at 18% (£3,186) and £31,900 at 24% (£7,656), a total of £10,842.

Crypto income is different: it is added to your other income and taxed at your Income Tax rates, with a £1,000 trading and miscellaneous income allowance available in most cases.

How do you work out a crypto gain?

Your gain on each disposal is the sterling proceeds minus the allowable cost of the tokens you disposed of. Because most people buy the same coin many times at different prices, HMRC requires you to pool your costs for each type of token (a "section 104 pool") and use the average cost — unless the same-day or 30-day rules apply.

The three matching rules, applied in order for each disposal, are:

1. Same-day rule. Tokens bought on the same day as the disposal are matched first.
2. 30-day rule (the "bed and breakfasting" rule). Tokens bought in the 30 days after the disposal are matched next, earliest purchase first.
3. Section 104 pool. Whatever is left is matched against your pooled average cost.

Worked example (GOV.UK pooling example). You buy 100 tokens for £2 each (£200) and later 300 more for £1 each (£300). Your pool is 400 tokens costing £500, an average of £1.25 each. When you sell 200 tokens, the allowable cost is £250. If you sold them for £600, your gain is £350.

A fuller example (bitcoin, 2025/26). You hold 1.5 BTC in your pool at a cost of £52,500. On 10 June 2025 you buy 0.2 BTC for £16,000 and, the same day, sell 0.5 BTC for £45,000. On 25 June 2025 you buy another 0.1 BTC for £8,500.

• Same-day: 0.2 BTC, proceeds £18,000, cost £16,000 — gain £2,000.
• 30-day: 0.1 BTC, proceeds £9,000, cost £8,500 — gain £500.
• Pool: 0.2 BTC, proceeds £18,000, cost £7,000 (0.2 of the 1.5 BTC pool) — gain £11,000.

Total gain on the disposal: £13,500. Your pool is now 1.3 BTC costing £45,500, and the 25 June purchase never enters the pool because it was matched under the 30-day rule. The section 104 pool guide walks through this step by step.

Allowable costs include what you paid for the tokens and transaction fees. Mining equipment and electricity are not allowable for Capital Gains Tax.

What about staking, mining and airdrops?

Rewards from staking, mining and lending are normally taxed as miscellaneous income at their sterling value on the day you receive them, unless the activity is so organised that it amounts to a trade. The tokens then go into your pool at that value as their cost, so you are not taxed twice on the same amount when you later sell.

Example. You receive 1 ETH as a staking reward when ETH is worth £2,000. You have £2,000 of miscellaneous income for the year, and your ETH pool gains 1 ETH with a cost of £2,000. If you later sell that ETH for £2,600, the Capital Gains Tax computation uses a £2,000 cost, giving a £600 gain.

You can receive up to £1,000 of trading and miscellaneous income a year tax-free under the trading allowance. GOV.UK says to contact HMRC if your total miscellaneous income is between £1,000 and £2,500, and to register for Self Assessment if it is over £2,500.

Airdrops are only Income Tax-able if you did something in return (or received them as part of a trade). Airdrops received for nothing are not income, but any later disposal is still within Capital Gains Tax. See staking tax in the UK for the detail, including DeFi.

Can you deduct crypto losses?

Yes. Losses on crypto disposals are set against gains in the same tax year automatically, and any unused losses can be carried forward to reduce future gains once you have claimed them. Claiming is done on your Self Assessment return or, if you have never needed to file, by writing to HMRC. You have 4 years after the end of the tax year in which the loss arose to make the claim.

Brought-forward losses are only used to bring your gains down to the annual exempt amount; the rest keep rolling forward. Losses on disposals to "connected people" such as family members can only be set against gains made on disposals to the same person. If tokens you still hold have become worthless, you can make a negligible value claim to crystallise the loss (CRYPTO22500).

Do you need to report crypto to HMRC?

You must report if your total gains for the tax year are above the annual exempt amount, or if you want to claim a loss. If you are already in Self Assessment, you also need to report your disposals when your total proceeds were more than £50,000 (for 2023/24 onwards; 4 times the allowance for earlier years), even if the gains were below the allowance.

Since the 2024/25 return, the Self Assessment capital gains pages (SA108) include a dedicated cryptoasset section, and for 2025/26 you report your crypto disposals there, in pounds. If you are not in Self Assessment, you can use HMRC's real time Capital Gains Tax service instead. Crypto income above the £1,000 allowance may also need reporting; see the thresholds above.

When are the UK crypto tax deadlines?

For 2025/26, register for Self Assessment by 5 October 2026 if you have not filed before, file your online return by 11:59pm on 31 January 2027, and pay any tax due by the same date. Paper returns are due by 31 October 2026. If you use the real time service, report by 31 December 2026 and pay by 31 January 2027.

Our crypto tax deadlines guide covers payments on account, penalties and what to do if you miss a date.

Does HMRC know about your crypto?

HMRC receives data from UK exchanges and, from 2027, from platforms in dozens of other countries under the Cryptoasset Reporting Framework (CARF). Since 1 January 2026, UK platforms have had to collect each user's name, date of birth, address and National Insurance number or Unique Taxpayer Reference, and their first reports, covering 2026 activity, are due to HMRC between 1 January and 31 May 2027. Users who do not give accurate details can be charged a penalty of up to £300.

HMRC uses this data to link crypto activity to tax records and to send "nudge" letters. Read does HMRC know about my crypto? for the full picture.

What records do you need to keep?

HMRC expects you to keep your own records for every transaction: the type of token, the date, whether you bought or sold, the number of units, the sterling value at the time, the running total you hold, plus bank statements and wallet addresses. Exchanges may only keep records for a short period or may close down, so the responsibility sits with you.

GOV.UK also warns that exchange transaction reports "are not tax calculations" and "will not keep track of your pooled costs". That is the job a calculator does: it turns your exports into pooled, matched computations you can keep as evidence.

What if you have unreported crypto from earlier years?

If you owe tax for the current or previous tax year, put it on your Self Assessment return. For earlier years, HMRC's Cryptoasset Disclosure Service lets you make a voluntary disclosure: you work out the tax, interest and any penalty, submit online, and pay within 30 days of submitting. How many years you must go back depends on why the tax was missed — 4 years if you took reasonable care, 6 if you were careless and up to 20 if it was deliberate.

Coming forward before HMRC contacts you generally leads to lower penalties than waiting to be prompted. Our Cryptoasset Disclosure Service guide explains the process, and if you have already received a letter, start with the letter helper.

What is changing in 2027?

Two draft measures announced on 13 July 2026 are due to take effect from 6 April 2027, subject to the Finance Bill: disposals of "eligible stablecoins" would become exempt from Capital Gains Tax, and certain cryptoasset loans and liquidity pool transactions would be treated as "no gain, no loss". Neither change applies to 2025/26 or earlier years.

Sources

• Check if you need to pay tax when you sell cryptoassets — GOV.UK
• Check if you need to pay tax when you receive cryptoassets — GOV.UK
• Capital Gains Tax rates and allowances — GOV.UK
• Capital Gains Tax rates — GOV.UK
• Capital Gains Tax: work out if you need to pay — GOV.UK
• Capital Gains Tax: if you make a loss — GOV.UK
• Income Tax rates and allowances for current and previous tax years — GOV.UK
• Self Assessment tax returns: deadlines — GOV.UK
• Report and pay your Capital Gains Tax: other capital gains — GOV.UK
• Information you need to give to UK cryptoasset service providers — GOV.UK
• Tell HMRC about unpaid tax on cryptoassets — GOV.UK
• CRYPTO20050 — Cryptoassets for individuals: which taxes apply — HMRC Cryptoassets Manual
• CRYPTO22100 — What is a disposal — HMRC Cryptoassets Manual
• CRYPTO22200 — Pooling — HMRC Cryptoassets Manual
• CRYPTO21200 — Staking — HMRC Cryptoassets Manual
• CRYPTO10400 — Record keeping — HMRC Cryptoassets Manual